Vladimir Putin spoke at the the Russia Calling! investment forum organized by state-owned VTB bank today. It was awesome.

Here’s basically what happened. After some two hours of boring, number-studded speeches, the room rustle-rustled when the man they — hell, we — had all been waiting for. He mounted the stage, plopped into the white leather chair and instantly assumed his classic sprawl-legged slouch, belt buckle a-gleaming. He then read a boring speech prepared for him by VTB and it was one he seemed not to have been familiar with. Then, after a speech by Morgan Stanley guy who could not get the slide-changing clicker to work (in front of VVP! Nerves!), it was time for Q&A.

And that’s when the fun began.

Someone asked about a corrupt court decision — said to have been worth some $300 million — and Putin, who tends to say nothing about the extremely independent Russian judiciary — promised to look into it. Someone asked about the privatization of a chunk of VTB. Someone asked about Gazprom’s market capitalization.

Then a lady got up, and asked Putin to address the fact that, “all the investors I meet with have big concerns, and they see that when the [Russian] government enters [into a deal/holding/etc.], the share price falls to nothing.” The conference, after all, was partly to convince foreign investment to come back to Russia, which it hasn’t really done since many billions fled in the fall of 2008.

Putin tried to convince her that that was not the case, that they sold out of enterprises like that for money. That the arrival of companies like Transneft (state oil transport concern) was good for them.

Lady: “Are they scared of you?”

Putin: “There’s no need to be scared of us.”

Then the lady brought up Yukos and the whole room froze. “There’s no meeting that goes by,” she said, “where investors haven’t asked about it.”

“Yukos is a special case,” Putin thundered, suddenly losing his jokey, back-slapping demeanor. He was pissed. Seriously, seriously pissed.

There are people in that company, Putin said, that “are responsible for murder. There are corpses hanging on them. Can you imagine a head of security that would order murders by his personal iniative for the company’s benefit?” he nearly shouted, referring to the case of Vladimir Petukhov. “I have a hard time imaging that.”

“It was proven by a court,” he added. (It — or at least Khodorkovsky’s role — wasn’t.)

Putin hates talking about Yukos. What was an attempt to bring a challenger to heel has gone a little awry, as Khodorkovsky’s sophisticated PR campaign — now joined by banished investor Bill Browder — has done significant and largely irreparable damage to Russia’s image with investors. Hungry as they are to make a quick buck on the volatile Russian economy, examples like Browder’s and Khodorkovsky’s do make them shudder and wonder, am I next? And Putin, who wants the money and the boom-era grandeur to come back, hates that people still remember MBK. His last attempt, during his August road trip, to pretend he simply hadn’t heard of the second Khodorkovsky trial made him look ridiculous. So now, he returned back to what he pulled during his last call-in show: rage.

The crowd was silent. They may have been intimidated and awed by his presence before, but now they were cowed.

Putin yelled a bit longer, before offering to drop the matter — “вынести это за скобки” — and he moved on to another favorite subject matter: needling Ukraine, represented on stage by the muscly, brainy, awkward Ukrainian Vice Prime Minister Sergei Tigipko. He began explaining all the ways Russia was economically better off than Ukraine, which was making “problematic” financial decisions.

Asked if he had any parting thoughts, Putin said, “Ukraine gets money from the IMF, and we’re an IMF donor.”

Snap.

Then VTB chairman Andery Kostin wished Putin a truculent and soppy happy birthday (tomorrow), and it was time for lunch.

27 Responses to Bully pulpit

Nice post! I agree that huge credit goes to the PR machines paid for by MBK and Bill Browder, who spend lots and lots of money lobbying think tank scholars, business leaders, and U.S. government officials to promote the idea that “it can happen to them, too.” I think one of the reasons Putin gets so frustrated (one among many reasons, that is) is because he’s meeting with captains of industry every week, hammering out deals with major Western corporations for expansions of foreign investment and so on. FDI is certainly not at pre-crisis levels, but the publicity around Yukos and Hermitage leads people to think that there’s no private property in Russia.

I’m sure Khodorkovsky and Browder will be chuckling today, unless they can’t temporarily forget that they’re either behind bars or locked out of massive previous wealth.

I mean, they do have a good case. There is private property, though things like Browder — which is more widespread and arguably worse — do happen and it is a real fear here, especially among small to medium business owners and young people thinking of starting businesses. Also, Chichvarkin, whose PR machine is far schlumpier, is a name everyone now knows, too. MBK and Browder have amazing PR machines, but they aren’t making this stuff up. It happens, and it scares Russians. Forget think tank scholars.

I’m referring mainly to the PR aimed at influencing the Western audience. I don’t dispute that property rights are a tenuous thing when it comes to Russian business. For big foreign multinationals, however, profits are less tenuous. (The same day Putin spoke at Valdai, where he ‘threatened’ to end all democracy and return to the presidency four more times like FDR, he met with CEOs from John Deere, Royal Dutch Shell, JP Morgan, and Boeing.)

This is why I find all the curiouser the apparent success of a PR campaign aiming to convince foreigners that their money and their profits will all be stolen. Surely, this is rare and risky primarily for people involved in political activities, like MBK, who wanted to be king, and Browder, who wanted to expose corruption?

Browder was not trying to expose corruption. He did his own “investigation” then announced it to the public to pump up the prices of his own shares. I think Putin noticed too late that Browder was making a fool of him.

Browder and MBK were both Communists (and that was always a small group), and now they are advocates for private property rights. I don’t buy it.

Kolesnikov is very critical of Putin. He himself asked him a question about Khodorkovsky in his last interview. If you read his articles,you can find some that are negative about Putin, some even mocking him. In your posts however,everything is always negative. Even something that you supported (Luzhkov dismissal), you’ve written about negatively. So yes, Kolesnikov is the objective reporter here.

You’re partly right. Khodorkovsky’s “sophisticated” PR campaign has done significant and largely irreparable damage to Russia’s image with investors who are interested in getting in, making a killing and getting out, leaving nothing behind but ashes. Okay, probably better than half-right, since that includes most of them. Hey, good going, Mikhail! Hope you’re never planning to move back after you get out of the slammer, if you ever do. That’s if your legal team leaves you enough money to buy a house.

Would you rather no one invested in Russia? Wouldn’t your argument then be that all these Western assholes have their heads up their asses and can’t see the riches and natural bounty in Rus? And if by “ashes” you mean “jobs for Russians,” then yeah, horrible. Totally fuckin’ awful.

I don’t know where you got that impression from what I said. I am strongly in favour of foreign investment in Russia, with a Russian partner and as a shareholder whose profit depends on the competitiveness and viability of the company. I am not in favour of investment in Russia that consists of low-risk profit-taking via currency manipulation or other cash-cow operations that rely on the Russian situation remaining dangerously volatile, which is anything but good for Russian job security. Are you deliberately misunderstanding?

If there are any assholes in the demographic, they’re Browder and Khodorkovsky, chuckling over the way their “sophisticated PR campaign” made the future just a little more uncertain for Russian companies that are courting foreign investors – especially that gaping asshole Browder, who bragged about all the moola he added to his own personal fortune by buying up undervalued stock and then organizing a public anti-corruption campaign against the company which forced the government to intervene. The company stock jerked upward – and Browder’s profits with it – but if anything, people lost their jobs as they were sacrificed in the service of visible anti-corruption efforts.

Your English is certainly good enough that you don’t need to lean on “fuck” for a modifier the way Bobby Brown leans on crack, and it doesn’t make you sound like a hardboiled journalist.

Jobs for Russians? Spare me. The intentions of Anglosphere investors and governments towards Russians were abundantly demonstrated in the 1990s, the time of their greatest power and influence in Russia ever. There were years then when deaths were exceeding births in Russia by almost a million a year, and the Washington Consensus response was “More reform! Faster!”. They cared not how, or even whether, Russians lived, only that the Russian government submit. It was evident even then that the situation was not sustainable. Then US President Clinton characterized the relationship: “We keep telling ‘ol Boris ‘Okay here’s what you have to do next. Here’s some more sh*t for your face’ “. But he could never get his bureaucracy to come up with anything other than more heaping plates of wet steamy brown stuff to offer.

The entire problem the Kremlin now has with the Anglosphere investor class and their paid-for punditocracy and governments derive from the fact that Medvedev and Putin are not drunken incompetent comprador buffoons who apply the steamy wet brown stuff to their faces as directed.

It was not Russian economic competence that restored living standards. It was the price of oil. Economic catastrophe was inherent in the collapse of communism. Reform was too slow, not too fast. The corruption was not an inherent element of conversion to a market economy (compare to Poland). Corruption was an all Russian element.

Your opinion is not opinion of all Russian, and so it is your personal view. Many Russian people think differently. In my opinion, the only choice for Russian salvation is Law. “Yukos affair” is lawlessness from all points of view!

“Law” works well when you have democracy for 2oo+ years.(like Uk and USA) And we have seen “democracy” in 90’s Russia, ain’t pretty. Rules of laws and democracy should be develope together, next 200 years should be real fun in Russia 🙂

And look into how US banks have been ramming fraudulent foreclosures through compliant courts. A few lawmakers and bureaucrats are raising a stink, but most legislators and regulators know who their source of political campaign contributions and future lucrative financial sector jobs are, so the legal/regulatory response can be relied upon to be superficial at best.

Rule of law? Not when the interests of the Anglosphere investor class are at stake.

Eltsin’s constitution was so full of holes it was virtually worthless. Oligarchs try to claim that what they did was not technically against the law, but that disgraces the memories of the hundreds of people killed so the law could be literally rammed through the parliament, 17 years ago this week.

The presumption of innocence ( not guilty until proven guilty) hasn’t been banned yet in Russia as many other human achievements (including the Constitution – or at least some of its articles ) – and Putin should be kept responsible for his false accusations !

The Russian Justice Initiative’s summary is actually not showing all of this horror. Here’s some snippets (and remember they did it to a completely random pensioned teacher they have abducted in the street while he was working in the burial detail and was fetching water to survivors of the siege):

13. At the Oktyabrskiy VOVD the officers intimidated and ill-treated the applicant for several hours. In particular, they severely beat him, cut his hair and forced him to chew and swallow it, pressed a red-hot nail into his hands, forehead, nostrils and tongue and carved a derogatory word “Chichik” on his forehead with a nail or knife.

14. The officers also questioned the applicant, but made no written record of the interrogation. They asked the applicant where he had fought as a rebel fighter and why there was a list of names in his pocket. The applicant replied that he was a teacher, had never fought and that the list included the residents of the Oktyabrskiy District of Grozny to whom he distributed water. It appears that the officers did not believe him. They told him that he would not leave the premises of the Oktyabrskiy VOVD alive.

15. The officers then took the applicant down to a basement, stood him against the wall and started shooting around him. They told him that he should “wait a little longer to die” and that they had not “[had] enough of mocking him yet” and took a break.

16. Some time later they returned to the basement with several other officers and started “playing football” with the applicant. They spent about two hours knocking him off his feet, kicking him and throwing him onto the concrete floor. From time to time the applicant lost consciousness, but the officers brought him round. According to the applicant, he lost most of his teeth and his ribs, jaw, arm and leg were broken as a result of this treatment.

(…)

32. The basement was divided into two rooms. One of them, measuring approximately 48 square metres (8 m x 6 m), was used as a torture chamber and contained various instruments, including an axe, a hammer, a sledgehammer, a shovel and scissors. According to the applicant, he was ordered to clean the room once and noticed bloodstains even on the ceiling which was 3m high.

33. The other room, measuring approximately 9 square metres (3 m x 3 m), was a cell. During the applicant’s detention twelve to fifteen detainees were kept there. The applicant stated that on numerous occasions the detainees were taken to the adjacent room and tortured. He could hear them screaming. Sometimes the door between the two rooms was left open and the applicant could see his cellmates being severely ill-treated. They returned to the cell severely beaten, two of them had their fingers missing and another detainee was brought back unconscious.

34. On several occasions the investigator interrogated the applicant about the object allegedly found in his house on 5 March 2000. The applicant was forced to sign a confession stating that the object in question belonged to him. The investigator also questioned the applicant about the activities of his neighbours. No transcript of those interrogations was ever made.

(…)

90. According to the applicant, upon his return home on 24 May 2000 he saw that his dog had been shot, his house partly burnt and his property, comprising his personal belongings and those of his relatives, furniture, an audio system, a satellite dish, looted. Nothing of value remained in the house. The applicant’s two Subaru vehicles and his Oldsmobile car were missing. Later, he found out from his neighbours that while he had been in custody, masked men driving one of his Subaru cars, an Ural truck and an armoured personnel carrier had come to his house on numerous occasions and taken away his property. The men had warned the applicant’s neighbours to stay away from his house, saying that they had mined it.

(…)

236. The Court is particularly struck by the incident of 11 March 2000, when a police officer of the Oktyabrskiy VOVD cut off the applicant’s left ear. It finds this to be an especially grave and abhorrent form of ill-treatment inflicted on the applicant which not only caused him acute physical pain but also led to his mutilation and disability – the complete loss of hearing in the left ear – and entailed long-lasting negative psychological effects (see paragraph 156 above). This method of ill-treatment was undoubtedly applied to the applicant intentionally, its only aim being to intimidate, humiliate and debase him and possibly break his physical and moral resistance. The Court finds it shocking that such a horrid act of violence was committed by a police officer who was, furthermore, a representative of the State seconded to the Chechen Republic to maintain constitutional order in the region and called upon to protect the interests of civilians.